SHANGHAI - IN scenes reminiscent of a generation ago, Chinese are tapping friends and relatives travelling abroad to bring back electronic devices that are unavailable in China.

The irony is the object they desire is made in China and the US company responsible for the scarcity is proud of its free-thinking image - Apple Computers.

'The iPhone has brought back the planned-economy era,' said Mr James Lei, director of the consumer electronics division at market research firm In-Stat China.

More than a year after its debut, analysts say plans to introduce the smart phone are conspicuously more advanced in West Africa than in China, the world's largest mobile phone market, with more than 600 million cellphone users.

Apple chief Steve Jobs said in June he expected to reach a deal in China this year and that the obstacles Apple had to overcome had to do with 'regulatory bodies'.

Chinese media reported on Tuesday that China Mobile, the country's largest handset operator, was in the final stages of talks with Apple to launch the iPhone in China. But neither company would confirm it.

In the meantime, Chinese consumers are not waiting for Mr Jobs. The country is widely considered the world's biggest market for smuggled, 'unlocked' and counterfeited iPhones.

More than 500,000 first-edition iPhones made their way to China, or nearly a tenth of the phone's global shipments of 5.2 million from June 2007 through March 2008, according to estimates from In-Stat.

Some estimates indicate 40 per cent of all 'unlocked' iPhones are in China, according to telecoms consultancy BDA.

Mr Guo Yu, a 26-year-old computer programmer, asked a friend who was travelling to the US on a business trip in April to buy him an iPhone. The friend had iPhone orders from two other people as well.

A three-step tutorial found on the Internet showed him how to unlock his phone so he could use it on his Chinese network.

'It's so easy,' Guo said, and added: 'I don't care when the iPhone goes on sale in China.'

He paid 3,000 yuan (S$629) for an eight-gigabyte iPhone that sells for US$399 (S$572) in the US.

Sellers on Taobao.com, China's answer to eBay, are offering the eight-gigabyte model of the new 3G iPhone for 4,900 yuan, 3.5 times the US$199 price tag.

'Limited units available for each buyer,' wrote one Taobao seller, whose ad featured long lines outside a US Apple store.

He claimed to ship the Chinese-made phones from San Francisco by courier.

Even when Apple does officially start selling the iPhone in China, the black market alternative might be more attractive.

The Ministry of Industry and Information Technology has asked Apple to de-activate the wireless Internet function on all handsets it sells in China, BDA said.

Another contentious point is China Mobile's commitment to building a third-generation, or 3G, high-speed network using the homegrown TD-SCDMA standard, incompatible with the WCDMA standard the latest iPhone is based on.

The longer the delays, the more the black market eats away at the high-end customers Apple needs.

The iPhone's price puts it out of reach for most Chinese consumers, but Apple would be targeting a profitable smart phone niche market that is expected to expand at a compounded annual growth rate of 26 per cent to reach over 180 million units by 2010, BDA said in a report.

Apple also has to fend off Chinese iPhone clones, such as Meizu Technology Co's M8 MiniOne device. The Guangdong-based company exhibited the 200 yuan iPhone look-alike at Germany's CeBit fair in Hanover - until it was confiscated.

How to tell iPhones from copycats is one of the hottest topics on the Chinese fan site iPhone.com.cn.

The site is an indicator of China's growing iPhone fever with 300,000 registered users and thousands more joining weekly, according to the site's editor Zhang Xing.

But it's not a question of demand stalling Apple's official Chinese launch of the iPhone, analysts said, but how much the company is willing to adapt its US-centric strategy to deal with China Mobile or one of its other state-owned competitors.

In the meantime, Chinese consumers are not waiting. -- AFP